Monday, August 6, 2012
Low Income Earners Burnt As Cost Of Solar Subsidy Spirals
RENTERS, pensioners and other low-income earners are paying for their wealthier neighbours to enjoy cheaper power under the state's skyrocketing solar subsidy system.
The Queensland Consumers Association says costs to subsidise solar are forecast to triple, as the state's bill to fund the scheme continues to grow.
More than 100,000 applications were received last month from homeowners wanting to profit from the state's generous 44c per kilowatt hour tariff - twice the retail power rate - which will continue for 16 years.
By installing solar systems up to 5kW, the mostly well-heeled applicants stand to earn $200-$300 a quarter from a subsidy that is costing their non-solar neighbours more each year.
One of those who applied was Algester resident Ron Ruys, who feels badly for his neighbours who are indirectly helping to pay for a $10,000 5kW system that will earn him extra income.
"I'm going to do it and I'm going to make money out of it," he said. "But it is unfair to other people because of the subsidy. I don't think people know what the 44c means to their bill."
Energy Minister Mark McArdle has estimated the tariff would cost $1.8 billion by 2028 if the scheme remained unchanged. The July 9 deadline limiting future payments at an 8c cent rate.
The Government projects that the annual cost of the subsidy will rise from $50 to $100 for each household from the surge in applications, and another $50 for upgrades to the power grid.
Whether the increases will become a reality depends on whether the Government is successful in cutting expenses elsewhere in the budgets of power suppliers, including "community services".
Queensland Consumers Association vice-president Ian Jarratt said the threat of a $100 annual hike should be a concern for many people trying to stretch their income.
"A dollar is always more for a pensioner," he said.
The association said it voiced concerns about the scheme's cost several years ago to state officials. "Things had been done far too quickly and not thought through enough, especially about the cost to consumers who could not afford to install solar systems," Mr Jarratt said.
The solar scheme has had some benefits: creating employment for thousands of installers, reducing the state's dependence on coal and lowering carbon emissions.
Prices of home solar systems have dropped 50 per cent.
Installer numbers have increased from 78 in 2008 to more than 1100 today. The number of customers has increased from 1200 to around 180,000.
On the downside, "all Queensland households and small businesses indirectly foot the bill", Mr McArdle said.
The Government said it was obliged by legislation to continue the 44c tariff for the next 16 years, and risked lawsuits if it reneged.
Posted by Joseph Gale at 5:17 PM